Current diabetes therapies cannot prevent life threatening hypoglycemic events, and chronic complications for hundreds of thousands of type 1 diabetes (T1D) and type 2 diabetes (T2D) patients (9-11). These critical-need patients represent a substantial investment opportunity, by their urgent need for a new solution beyond life- sustaining exogenous insulin replacement, namely one that could provide long-term and precise glucose control. Such a robust and long-acting cure is presently available; islet and pancreas transplantation demonstrates the proof-of-concept (POC) to replace beta-cell (insulin-producing cell) function and eliminate dependency on insulin injections (12-13). However, their wide-spread use is severely curtailed by limited organ supply and the requirement for chronic immunosuppression (14-15). In contrast, ViaCyte?s GMP human embryonic stem cell (hESC) line provides an unlimited supply of stem cells and their differentiated functional beta cells as a starting material; ViaCyte?s immune protection macro-encapsulation device can potentially eliminate the need for chronic immunosuppression in critical need patients (5,7). Indeed, as a first step, PEC-ENCAP or hESC-derived pancreatic progenitor cell (Stage 4 cell) in a macro-encapsulation device, proves that such combined technology is feasible in the clinic; it is safe and well-tolerated by patients, progenitor cells can survive and differentiate to bona-fide beta-cells in a device in T1D patients (5). Yet, hESC-derived functional beta-cells in a macro-device, we hypothesize, will be a more efficacious cell therapy treatment option requiring a smaller therapeutic footprint per patient, will be less prone to off-target differentiation, and will provide a more rapid diabetes relief. Our goal is to advance the hESC-derived functional beta-cell in a macro-device concept (defined as ?VC-03?) towards commercialization. We are uniquely positioned for high probability of future commercial success, by our ability to test multiple GMP-compliant hESC-derived stages of advanced beta-cell differentiation (endocrine precursor / Stage 5; immature beta-cell / Stage 6; functional beta-cell / Stage 7) in two macro-devices (macro-encapsulation / direct delivery). We aim to provide POC information required to initiate IND-enabling studies, by determining which specific combination of Stage 5, 6 or 7 cell and macro-device type is most appropriate for the eventual commercialization of the VC-03 product for critical-need patients. The goal of Aim 1 is to provide the scale-up and cryopreservation capabilities to Stages 5-7 of differentiation, ensuring a stable cell supply for eventual IND- enabling studies / clinical trials. The goal of Aim 2 is to lay the groundwork for in vivo efficacy data required by IND-enabling studies. The quarterly feedback cycle between characteristics obtained in parallel from Aim 1 (in vitro manufacturing) and Aim 2 (graft survival, in vivo functional analysis) will provide an unbiased platform for deciding which advanced beta-cell stage / macro-device combination is most appropriate for the IND-enabling studies of VC-03. ViaCyte has proven competencies in the establishment of a safety / target profile of a combined cell and device technology required for eventual IND-success.